Articles Posted in ITC

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Over the weekend, Apple and HTC settled all of the long running patent suits that both companies had filed against each other in multiple jurisdictions. Although few details of the settlement were released in the two sentence press release that included brief quotes from HTC and Apple, the companies did state the the they had reached a “global settlement” that included dismissal of all current lawsuits. The companies also specified that the license extends to current and future patents held by both parties for the next ten years. The remainder of the terms, including the financial terms, are confidential.

And so one of the earliest and longest patent battles over smartphones ended quietly. Although no monetary terms were disclosed, it is likely that HTC is paying a royalty to Apple in order to put an end to the litigation. The impact on HTC from the Apple lawsuits was significant, hurting both its stock price and its ability to timely ship product due to the exclusion order Apple obtained at the ITC. As a result of the settlement, HTC will now be able to focus on making and selling products instead of litigation. That can only be a positive for HTC.

But what about Apple?
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Complainant Knowles Electronics, LLC (“Knowles”) initiated an investigation with the ITC against Analog Devices, Inc. Amkor Technology, Inc. and Avnet, Inc. (collectively, the Respondents) over silicon microphone packages. During the proceeding, Knowles submitted a rebuttal witness statement from Mr. Phillip Green. The Respondents moved to exclude the rebuttal statement alleging that Mr. Green’s opinion of the commercial success of the asserted claims of the patents-in-suit and the commercial success of Knowles products was outside the scope of his expertise.

According to the Administrative Law Judge, “Respondents assert Mr. Green fails to provide any evidence to support the nexus between the asserted patents and the commercial success of the Knowles MEMS products and cannot do so because he is not qualified to opine on what features resulted in their commercial success.”
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Google moved to intervene as a respondent in the investigation brought by Nokia against HTC. HTC supported Google’s intervention and Nokia opposed it. Google asserted that it should be permitted to intervene as a respondent to defend its products and services and to protect its interest in the investigation. As part of this argument, Google asserted that its intervention would aid in the adjudication of the issues in five of the nine patents because the products or services accused of infringement are proprietary Android applications that are developed by Google and supplied by HTC.

In supporting Google’s intervention, HTC asserted that Google is uniquely situated to provide information that is necessary for the efficient resolution of the investigation. In support of this position, HTC pointed out that Nokia’s claim charts rely on features of Gmail, Google Calendar and other aspects of the Android operating system. HTC then claimed that Google’s intervention would eliminate the need for complicated third party discovery regarding these features of Android.
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MyKey Technology Inc. initiated an ITC Investigation against several respondents, including Guidance Software, Digital Intelligence, Yec Co., Ltd.. and Cru Acquisitions. The parties served initial reports, rebuttal reports and supplemental reports in the Investigation. The procedural schedule only provided for initial expert reports and rebuttal expert reports. Nonetheless, the parties served supplemental expert reports and did not seek leave of the Administrative Law Judge before doing so.
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The Respondent, Pandigital, Inc. (“Pandigital”) in this ITC investigation filed a motion for leave to file its motion for summary determination out of time. The proposed schedule in the matter required the filing of the summary determination motion by July 17, 2012. The deadline for filing documents with the ITC is 5:15 p.m. Eastern Time and Pandigial filed the summary determination motion on July 17th, but at 7:25 p.m. Eastern Time. Accordingly, the motion was considered filed on July 18, 2012, one day late.

Pandigital argued in its motion for leave to file out of time that the document was late because its counsel mistakenly believed that the filing deadline was 11:59 p.m. Eastern Time. As Pandigial’s counsel acknowledged, the ITC Handbook on Filing Procedures states:

When the Commission has imposed a deadline on the filing of a document, the Secretary will consider the document timely filed electronically only if the user has “clicked” the “confirm” button on the final confirmation page for electronic submission by 5:15:59 p.m., eastern time, on the day that the document is due to be filed, and received e-mail notification of receipt.
(ITC Handbook on filing Procedures at Section F(1).)
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In May 2012, the Complainants in this ITC proceeding, Standard Innovation (US) Corp. and Standard Innovation Corporation (“SIC”) filed a motion to terminate the Investigation in part with respect to U.S. Patent No. D605,779 (the “‘779 patent”). SIC filed the motion seeking to withdraw its allegations with respect to the ‘779 patent in order to streamline the investigation and to conserve the resources of the parties, the Administrative Law Judge, and the Commission. The Respondents opposed the motion.

In analyzing the motion, the Administrative Law Judge first considered the procedural basis for the motion: “A complaint can seek partial termination of an investigation by withdrawing asserted claims or asserted patents pursuant to Commission Rule 210.21(a)(1). See Certain Tool Handles, Tool Holders, Tool Sets, Components Therefore, Inv. No. 337-TA-483, Order No. 7 (Apr. 22, 2003) (granting motion for partial termination as to certain claims where complainant ‘determined not to proceed with the investigation as to [certain claims], on the ground that a reduction in the number of patent claims in a more expeditious manner and will also reduce the time and resources required from all of the parties and the administrative law judge to proceed with the investigation’). In the absence of extraordinary circumstances, such partial termination will be granted. Id. Moreover, while good cause need not be shown in support of a complainant’s voluntary request to withdraw patent claims from an investigation where withdrawal would serve to ensure resolution of the issues remaining in the investigation in an orderly fashion.’ Certain Data Storage Systems and Components Thereof, Inv. No. 337-TA-471, Order No. 21 (Oct. 8, 2002) (‘The withdrawal of 64 claims will narrow and focus the issues in this investigation and allow all parties to concentrate their efforts on matters about [which] there is true controversy.’)”
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Complainant, Samsung, filed a motion to strike certain paragraphs of Apple’s expert’s, Dr. James Davis, report regarding non-infringement and lack of a domestic industry. Samsung asserted that the Davis Report contained arguments that Apple failed to disclose in response to interrogatories and, as a result, Samsung was prejudiced because the untimely arguments prevented Samsung’s infringement and domestic industry expert from addressing them. Samsung explained that after late discovery from a non-party, Qualcomm, Apple should have supplemented its contentions and instead waited until the rebuttal report to assert for the first time that Samsung had not shown sufficient evidence to establish the domestic industry requirement.

Apple responded by arguing that Dr. Davis’s opinion was not new because Apple’s interrogatory responses expressly identified that Samsung failed to put forth evidence that the domestic industry products input the specific information needed for the patent-in-suit. Apple also asserted that Samsung was engaging in discovery gamesmanship in that the Qualcomm deposition occurred after Samsung’s initial report was submitted and that the Administrative Law Judge had approve the late deposition.
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In the running battle between Apple and Samsung that is playing out in courts and agencies around the world, Apple filed a motion seeking sanctions against Samsung for the alleged spoliation of evidence. Apple alleged that Samsung should be sanctioned for spoliation because Samsung deliberately failed to take institutional steps to retain or back up emails sent or received using its computer email system. Apple also alleged that Samsung had no systematic or company-wide oversight procedures in place to ensure that its employees make appropriate decisions as to which emails are relevant and responsive or to ensure that relevant and responsive emails are in fact saved to employee hard drives.

Samsung denied Apple’s allegations and asserted that it began preserving documents when Apple filed its complaint and that Apple had not shown that Samsung or any of its employees destroyed relevant data after that date. Samsung also stated that even if Apple could establish that evidence was destroyed after the complaint was filed, Apple could not show that Samsung acted in bad faith or with any intent to impair Apple in its case. Samsung also noted that the majority of the accused products were released after the complaint was filed and therefore “[a]ny emails relating to Apple’s claims against these products (design, copying, etc.) would have to predate their release, meaning that any documents not kept would have been deleted pursuant to Samsung’s standard email retention policy. Hence, there is no basis for Apple’s claim that evidence of design and development, copying, or design around has been destroyed.”
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Complainant OSRAM AG (“OSRAM”) moved for a summary determination that it had satisfied the economic prong of the domestic industry requirement. Respondent LG Electronics, Inc. and other LG entities (collectively, LG) opposed the motion.

OSRAM moved for summary determination on the ground that it has devoted substantial resources in the United States, including engineering and research of products that incorporate LEDs. As stated by the Administrative Law Judge, “OSRAM contends that it satisfies the economic prong of the domestic industry requirement as set forth in 19 U.S.C. ยง 1337(a)(3)(C) for U.S. Patent Nos. 7,151,283 (“the ‘283 patent”) and 7,271,425 (“the ‘425 patent”). OSRAM states that it has devoted substantial resources in the United States, including investments in domestic engineering and research and development (“R&D”) of products incorporating LEDs, at its two domestic subsidiaries, OSRAM Opto Semiconductors, Inc. and OSRAM Sylvania Inc. Mem. at 1. OSRAM further states that these investments relate to work on OSRAM LEDs with chip level conversion technology (“OSRAM LEDs with CLC”), which OSRAM asserts are covered by claims of the ‘283 patent, and OSRAM’s Advanced Power TOPLEDs (“OSRAM APT LEDs”), which OSRAM asserts are covered by claims of the ‘425 patent Id OSRAM summarizes its investments in domestic engineering and R&D from October 2009 through September 2011.”
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In this matter pending before the International Trade Commission (“ITC”), the ITC (Administrative Law Judge James Gildea) rejected the respondent’s pre-hearing statement for failing to follow ITC Ground Rule 7.1. As noted by Judge Gildea, the parties filed their respective prehearing statements on May 3, 2012. “Ground Rule 7.1 requires complainants and respondents to provide party-specific additional submissions correlating the asserted claims to the accused products or prior art, respectively.” Judge Gildea also noted that the rule sets forth sample charts to avoid any confusion as to what data is required.

Judge Gildea then noted that “[o]ther parties in other investigations have not had any trouble understanding the requirements. Indeed, complainants in this Investigation submitted a one page chart providing the information requested.”
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